By Stephanie Kelly, Suzanne McGee and Hannah Lang
NASHVILLE (Reuters) – Republican candidate and former U.S. President Donald Trump once criticized cryptocurrencies, calling them a “scam.” Now he will headline one of the industry's biggest conferences.
Trump, who made the comment in 2021, will speak Saturday, the final day of the three-day 2024 convention in Nashville. Also speaking will be former Republican nominee Vivek Ramaswamy, Sen. Bill Hagerty of Tennessee and Sen. Cynthia Lummis of Wyoming.
Among Democrats, U.S. Rep. Ro Khanna of California is on the list.
The industry has rebounded quickly after FTX and a number of other cryptocurrency firms collapsed in 2022, sending token prices plummeting and forcing several companies into bankruptcy. Digital asset advocates say cryptocurrency users are becoming a growing political force in this election cycle, though it’s unclear how many users would prioritize crypto over other issues at the ballot box.
The Republican Party is courting their votes by promising lighter regulation, potentially tying a currency built to bypass the government to a major American political party.
“For most of its history, cryptocurrencies were really a nonpartisan issue,” said David Yermack, a professor at New York University's Stern School of Business, because both Republicans and Democrats neither understood them nor were interested in learning more.
“I think in the last year or two Republicans have started to move a little bit more quickly in that area.”
Stand With Crypto, a nonprofit industry group backed by cryptocurrency exchange Coinbase (NASDAQ:), has organized more than 1.3 million advocates. Meanwhile, three major pro-crypto PACs (Fairshake, Defend American Jobs, and Protect Progress, all of which were nonexistent until this cycle) have raised more than $230 million to support like-minded candidates.
That influence is already being felt. Fairshake, a political action committee that promotes pro-cryptocurrency candidates, has spent more than $10 million this year against progressive California Democrat Katie Porter, who was running for Senate. Porter, who questioned the effect of bitcoin mining on climate change, lost her primary.
Some cryptocurrency advocates are backing Trump, including the billionaire Winklevoss twins, who founded the cryptocurrency company Gemini. They each gave him $1 million worth of bitcoin, but had to take back the money because it exceeded the maximum allowed by federal law.
Overall, 7% of U.S. adults owned or used cryptocurrency in 2023, down 3 percentage points from 2022 and 5 percentage points from 2021, the Federal Reserve reported in May. But the annual convention is drawing more politicians than ever.
“There's a joke going around that the speaker list looks like Republican National Convention Lite,” one attendee said in an interview, referring to the Republican National Convention in Milwaukee in mid-July.
TRUMP'S NEW HUG
Trump’s appearance at Bitcoin 2024 is his latest show of support for the industry. At a June fundraiser in San Francisco, he criticized Democrats’ attempts to regulate the sector. Last month, he met with bitcoin mining companies at his Mar-a-Lago resort.
“We've tried to build a relationship with the Biden administration, but unfortunately they haven't been receptive,” said Jayson Browder, director of public policy for Marathon Digital (NASDAQ:) Holdings, who attended the Mar-a-Lago meeting. “And former President Trump has been more than receptive and is now being an active supporter of our industry.”
Trump recently indicated that he would like to see more bitcoin mining by American companies.
Cryptocurrency executives are upset with the Securities and Exchange Commission's enforcement actions under US President Joe Biden.
The White House told Reuters that the Biden-Harris administration will continue to meet with stakeholders and work with Congress to develop the necessary safeguards to realize the potential benefits and opportunities of crypto-asset innovation.
Harris is likely to push Biden's crypto policies if he wins the presidential election in November.
Neither the Trump nor Harris campaigns immediately commented for this article.
Traders betting on a second Trump presidency are flocking to asset classes likely to get a boost under his administration.
Cryptocurrencies, and Bitcoin in particular, are “the cleanest and most direct way to play the Trump deal so far,” said Cameron Dawson, chief investment officer at NewEdge Wealth.
Hillary Adler, one of the conference attendees who co-founded the BitcoinOS operating system, had previously voted Democrat but now describes herself as a left-libertarian. Adler, who considers herself an undecided voter, said she is not surprised that some Republican politicians have chosen to support cryptocurrencies.
“Republicans have always had better long-tail strategies, politically,” he said. “Now, they care about crypto.”
